Africa's richest man tells Nigerian government to ban fuel imports, but marketers raise concerns about monopoly
Africa's richest man, Aliko Dangote, asked the Nigerian government to stop importing petrol and diesel, saying it's hurting local refineries and damaging the economy.
He believes the government should support local production and claimed his refinery has already exported over 1.3 billion litres of petrol in less than two months.
But fuel marketers strongly disagree, warning that banning imports could create a monopoly and make fuel supply more difficult for Nigerians.
Speaking at the Global Commodity Insights Conference in Abuja, hosted by the Nigerian Midstream and Downstream Petroleum Regulatory Authority in partnership with S&P Global Insights, Dangote made it clear that petroleum products should be included in the list of banned imports.
He said, 'The Nigeria First policy announced by His Excellency, President Bola Tinubu, should apply to the petroleum product sector and all other sectors.'
According to him, local refineries are struggling because of what he called dumping of fuel by importers; bringing in products that are below acceptable standards and cheaper than what local producers can offer.
'And to make matters worse, we are now facing increased dumping of cheap, often toxic petroleum products, some of which are blended to substandard levels that would never be allowed in Europe or North America,' he said.
He also pointed to the influence of Russian crude oil on African markets. 'Due to the price caps on the Russian petroleum products, discounted petroleum products produced in Russia or with discounted Russian crude find their way to Africa, severely undercutting our local production, which is based on full crude pricing. This has created an unlevel playing field in most African countries. Petrol and diesel are sold for about a dollar net of taxes. In Nigeria, due to this unfair competition, this price is just about 60 cents, even cheaper than Saudi Arabia, which produces and refines its own oil. This is due to the fact that we are having too much dumping,' he said.
He also addressed the issue of monopoly: 'Let me take this opportunity to address concerns around monopoly and dominance. The reality is that too many people who have the means and the opportunity to contribute meaningfully to our nation's growth choose instead to criticise from the sidelines while investing their wealth abroad.'
To show that his refinery is performing well, Dangote shared that Nigeria has already become a net exporter of refined fuel.
'Today, Nigeria has actually become a net exporter of refined products. Before I came on the podium, I asked my people how many tonnes of PMS we have actually exported. From June beginning to date, we have exported about 1 million tonnes of PMS, within the last 50 days,' he said.
Marketers push back
But oil marketers are not in support of the idea. The Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) said banning imports would hurt the industry.
Chinedu Ukadike, National Publicity Secretary of IPMAN, said, 'We independent marketers will depart from that request. If the government does that, that means we will not be able to check inflation and monopoly, since it is the only refinery operating in the country now. We should continue to import even as we buy locally.'
He disagreed with Dangote's claim that importation hurts local refining. 'Importation won't kill local businesses or refineries; it will strengthen them. It will ensure local refineries step up their game. I don't agree with Dangote on this,' he said.
Billy Gillis-Harry, National President of PETROAN, also pushed back on the suggestion. 'I don't agree with Dangote. We are running a free economy. There's no reason why any one company should have an overarching value on the entire industry.'
He added, 'Importation is not killing the economy. Importation is stabilising the sources of petroleum products. Importation of all products is useful. However, those that can be produced in Nigeria, like toothpicks, garri, egusi soup, cassava, and others like that, should be banned. But importation of refined petroleum products should not be banned because it helps to ensure that there are multiple sources of energy and replenishment.'
What's next for Dangote
Last Friday, Dangote stepped down as Chairman of Dangote Cement to focus more on his refinery, petrochemicals, fertiliser business, and government engagement.
The billionaire businessman has insisted that his refinery can meet Nigeria's fuel needs. He recently shared that production would rise from 650,000 barrels per day to 700,000 by December.
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Yahoo Finance Chartbook: 35 charts tell the story of markets and the economy midway through 2025
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"It strikes us as imprudent to experiment with the limits of market patience, but governments in several major countries nevertheless seem inclined to do exactly that." This project would not be possible without the work of Yahoo Finance Senior Editor Brent Sanchez, who turned Wall Street jargon into a digestible visual presentation of the current market moment. And a special thanks to Yahoo Finance's team of editors who worked on this project, including Myles Udland, David Foster, Nina Moothedath, Adriana Belmonte, Grace O'Donnell, and Brett LoGiurato. Most of all, thank you to all of the experts who contributed their time and thought to this project and helped make this Chartbook such a valuable snapshot in economic time. Josh Schafer is a senior markets reporter for Yahoo Finance. Follow him on X @_joshschafer. Have thoughts on volume five of the Yahoo Finance Chartbook or have a specific question about markets or the economy you'd like to see a Chartbook for? 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Boston Globe
19 minutes ago
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Yahoo
22 minutes ago
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This Is, Officially, the 3rd Priciest Stock Market in Over 150 Years -- and There's No Mistaking What Comes Next for Stocks, Based on History
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One such tool is the valuation-based Shiller price-to-earnings (P/E) Ratio, which is also commonly referred to as the cyclically adjusted P/E Ratio, or CAPE Ratio. Value is, itself, a very subjective topic. What one investor believes is a bargain might be viewed as pricey by another. The subjectivity of valuations is one of the reasons the stock market is so unpredictable. When most folks assess value, they often lean on the time-tested P/E ratio, which divides a company's share price by its trailing-12-month earnings per share (EPS). The issue with the P/E ratio is that recessions and shock events can render it useless. This is where the S&P 500's Shiller P/E comes into play. The Shiller P/E is based on average inflation-adjusted EPS over the prior 10 years. Since shock events and recessions tend to be short-lived, they can't skew the results for the Shiller P/E in the same way they can with the traditional P/E ratio. In December, the S&P 500's Shiller P/E hit a closing high during the current bull market of 38.89. But on Friday, July 25, it surpassed this mark with a closing multiple of 38.97. This is now, officially, the third-priciest continuous bull market when back-tested to January 1871. There are only two previous instances where the Shiller P/E has been higher than 38.97 -- and the end result wasn't pretty for investors either time: In December 1999, just months prior to the popping of the dot-com bubble, the S&P 500's Shiller P/E hit an all-time high of 44.19. On a peak-to-trough basis, the S&P 500 lost 49% of its value during the bursting of the dot-com bubble, while the Nasdaq Composite plummeted 78%. During the first week of January 2022, with fiscal stimulus fueling the U.S. economy and stock market, the Shiller P/E crept ever-so-slightly above 40. During the 2022 bear market, the benchmark index shed 25% of its value, with the Nasdaq peaking at a 36% decline. In fact, all five prior occurrences (not including the present) where the Shiller P/E Ratio has surpassed 30 and held this level for at least two months were eventually followed by declines in one or more of the major stock indexes ranging from 20% to as much as 89% (during the Great Depression). Although there's no rhyme or reason as to when Wall Street's major stock indexes will hit their respective tops, the S&P 500's Shiller P/E makes clear that premium valuations are a harbinger of trouble for the stock market. It's simply a matter of time before a sizable downdraft occurs. Elevator-down moves represent surefire buying opportunities for investors The prospect of another elevator-down move for the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average probably isn't what you want to hear with stocks staging one of their strongest intra-year comebacks in history. Nevertheless, elevator-down moves in stocks often provide some of the best investment opportunities. Let's make one thing clear: Downdrafts in Wall Street's major stock indexes are unavoidable. No amount of fiscal and monetary policy maneuvering can stop corrections, bear markets, or the occasional crash from occurring. These are normal, healthy, and inevitable events. But the most important thing to recognize about these often emotion-driven events is that they're short-lived. In June 2023, the analysts at Bespoke Investment Group published a data set on X (previously Twitter) that calculated the calendar-day length of every bull and bear market for the S&P 500 dating back to the start of the Great Depression in September 1929. On one hand, the average S&P 500 bear market has lasted for 286 calendar days, which is less than 10 months. On the other side of the coin, the typical bull market has endured for an impressive 1,011 calendar days, as of June 2023. In other words, the average bull market lasts about 3.5 times longer. In addition to bull markets lasting disproportionately longer, a study from Crestmont Research finds that time is an undefeated ally of investors. The analysts at Crestmont calculated the rolling 20-year total returns of the S&P 500, inclusive of dividends, back to the start of the 20th century. Even though the S&P didn't come into existence until 1923, the performance of its components was tracked in other major indexes back to 1900. This provided 106 separate 20-year periods of total return data. Crestmont's newest data set shows that all 106 rolling 20-year periods produced positive annualized returns. Put simply, buying an S&P 500 tracking index (hypothetically speaking) at any point between 1900 and 2005 and holding it for 20 years would have made you money every single time. Though it's a bit of a coin flip to predict how stocks will perform over the next couple of quarters, history conclusively shows that Wall Street's major indexes head higher over 20-year periods. 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The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This Is, Officially, the 3rd Priciest Stock Market in Over 150 Years -- and There's No Mistaking What Comes Next for Stocks, Based on History was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
